Camden-based American Water Works Co., Inc. is set to sell its regulated New York operations to Liberty Utilities, the regulated utility business of parent company Algonquin Power & Utilities Corp.
American Water and Liberty Utilities anticipate the sale will close in the latter half of 2020. The parties have agreed to a sale price of approximately $608 million in cash, subject to customary adjustments. The completion of the transaction is subject to the satisfaction or waiver of various conditions including regulatory approval by the New York Public Service Commission and the receipt of other various customary closing consents and approvals.
Liberty, which has 800,000 customer connections in 14 states, will work closely with New York American Water and the New York Public Service Commission to ensure a smooth transition. Local management and operations teams will be maintained and empowered to continue to deliver safe and reliable service. No jobs will be lost as a result of the transaction, with a commitment by Liberty Utilities to maintain existing employment terms for two years following the closing including keeping salaries and benefits comparable for New York American Water employees.
Customers should also not expect any impact on water rates as a result of the acquisition. Liberty Utilities is also committed to continuing to invest in the water system to improve water quality, customer education on conservation and community outreach. They will also work with regulatory and other state officials as well as with New York American Water during the transition to address the burden of local taxes on New York American Water’s customers, which can account for more than half of their monthly bills.
Wells Fargo Securities, LLC is serving as exclusive financial adviser and Holland & Knight LLP is serving as legal adviser to American Water.